Is an Inheritance Marital Property in New Brunswick After Separation?

You have received an inheritance, or expect one, and your marriage is ending. You want to know whether your spouse can claim part of it, and whether putting it toward the family home or a joint account changes the answer.

This article explains what can be said in general terms about the Marital Property Act, how an inheritance actually reaches a beneficiary, and what records and steps help. It does not replace advice on your own situation, because the treatment of an inheritance turns on the exact wording of the Act and on how the money or property was used.

This article covers the law of New Brunswick.

Why there is no one-line answer

People often hear that an inheritance is always yours alone. How this applies to you depends on your situation, including what happened to the inheritance after you received it, so it is worth confirming with a lawyer. Keeping it separate, using it to pay down a mortgage, or depositing it into a joint account are the kinds of details that can matter.

Because those details matter, treat any quick answer, including from friends or online forums, with caution. A lawyer can read the current law against your documents and tell you where you stand.

Who the Marital Property Act covers

Under the Marital Property Act, 'spouse' means a married person. That means the Act's division rules are aimed at married spouses, not at unmarried partners.

If you and your partner lived together without marrying, the Marital Property Act is not the route for dividing property. Other rules, such as support obligations under the Family Law Act for certain common-law partners, may apply instead, and those depend on how long you lived together and on other facts.

How an inheritance reaches you

When a person dies, their real and personal property vests in the personal representative, meaning the executor or administrator, whatever the will says. The personal representative collects assets, pays debts and taxes, and then distributes what remains to the people entitled.

So your inheritance may not be yours in practical terms until the estate has been administered. Funeral expenses, probate tax and fees, and certain other costs are paid from estate assets in a set order before beneficiaries receive their shares.

If the deceased left no will, the Devolution of Estates Act decides who inherits. For example, where there is a surviving spouse but no issue, the whole estate goes to the surviving spouse, and grandchildren count as issue when they take in place of a child. That matters if your inheritance came from a relative's intestacy, because the rules decide who the beneficiaries are, not the family's wishes.

Mixing an inheritance into the home or joint funds

Whether mixing an inheritance into other money or property changes your position depends on your situation, so it is worth confirming with a lawyer. As a practical matter, a clear paper trail showing where the inherited money came from and where it went makes it easier to explain your position. Commingled money is harder to trace.

Things people commonly do that raise the issue include the following.

• Depositing inherited money into a joint bank account.
• Using it for a down payment on, or to pay down the mortgage on, the family home.
• Putting the home or an account into both names after you receive the money.
• Using it for renovations or everyday family costs.

If you are still married and the inheritance has not yet been spent or deposited, ask a lawyer before moving it. Once it has been mixed, it can be difficult to undo.

Timing rules that can catch people out

If your spouse dies, the surviving married spouse may apply to the Court to have marital property divided in equal shares as against the deceased's estate. The application must be made within four months of death, and the period can be extended if the spouse did not know of the death or was prevented by circumstances beyond their control. This is available to married spouses only.

Separation can also affect other arrangements. Under the Enduring Powers of Attorney Act, separation of spouses or common-law partners ends the authority of a spouse or partner attorney unless the document provides otherwise.

What to do next

Start by collecting the records that show what you received and what you did with it. Then speak with a lawyer before you move money, change title to the home or sign a separation agreement.

• Copies of the will, or proof of how the estate passed to you.
• Estate correspondence and any statement of distribution from the executor or administrator.
• Bank statements showing when the inheritance arrived and where it went.
• Mortgage, deed and account records showing whose names are on them.
• Receipts for any renovations or large purchases made with inherited money.
• Your marriage date and separation date.

Frequently asked questions